On-chain data shows that Bitcoin addresses with zero sales history participated in significant accumulation before this recovery phase began.
Bitcoin flows to accumulation addresses have increased sharply recently
As an analyst explains in a CryptoQuant Quicktake jobAccumulation addresses on the Bitcoin network have recently shown significant inflow activity.
THE “accumulation addresses» here refers to Bitcoin wallets that have never carried out outgoing transactions on the blockchain. In other words, the accumulation addresses are essentially the HODLers of the network.
However, not all addresses without a sales history are included in this cohort, as there are other requirements. The address must contain at least two incoming transactions, the last of which must have occurred within the last seven years.
These exist because a wallet with a single transfer would not create a pattern one way or the other, and addresses that have been inactive for more than seven years are more likely to have reached old age by being lost rather than due to HODLing.
Only addresses holding more than 10 BTC are counted in accumulation addresses. Naturally, wallets linked to exchanges and miners are excluded from this cohort, as they represent the permanent sell side of the market, which is on the opposite end of the spectrum from these HODLers.
Now here is a chart that shows the trend of Bitcoin inflows entering this group’s combined balance over the past year:
The value of the indicator appears to have been quite high in recent days | Source: CryptoQuant
As the chart above shows, these accumulation addresses saw extremely large inflows on the 15th of this month. Most notably, these HODLers received 17,800 BTC in their balance with this spike.
At the time of these inflows, the price of the cryptocurrency was around $61,600, so the purchases would have cost these investors almost $1.1 billion.
It is interesting to note that the price of the asset started at a recovery run shortly after this buying frenzy, which culminated with it surpassing the $71,000 mark earlier today.
The accumulation of these HODLers could naturally have been a factor behind the rally, but it probably wasn’t the only reason. Rather, it appears to be potentially intelligent investors who anticipated the rally and therefore bought at the lows.
The chart shows that the indicator also recorded two extreme peaks earlier in the year. Following these two events, the cryptocurrency saw an upward price trend.
The accumulation has certainly paid off this time around for these Bitcoin HODLers, as the stack they purchased is now worth over $1.24 billion.
BTC Price
At the time of writing, Bitcoin is trading at around $69,600, up 13% over the past week.
Looks like the price of the coin has seen a pullback since its high earlier in the day | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, CryptoQuant.com, chart from TradingView.com
